This brief outlines opportunities to improve rural
livelihoods in Peru through policy and institutional changes
in the dairy and camelid fiber sectors, both of which include
large numbers of small producers.
Strategic Entry Points for Pro-Poor Development
Despite problems which limit the prospects for successful
pro-poor development policies, there are a number of strategic
entry points to improve opportunities for smallholder producers
to benefit from expansion in the livestock sector. The six
most important entry points are:
• Support to smallholder producers associations.
Since smallholders must ultimately be protagonists in the
processes that lead to the adoption of pro-poor development
policies, strengthening associations that represent them is
critical. The international community could further this goal
by providing financial support and / or technical assistance.
• Assistance to small-scale fiber-processing industries.
Promotion of small-scale fiber-processing operations would
help to create more jobs and opportunities in artisan garment
production, generating more value-added within Peru in the
camelid fiber sector. The establishment and consolidation
of small-scale fiber-processing industries could also reduce
the herders’ dependence on the three major processing
companies, and improve producer prices. International organizations
and donors should thus consider providing technical training
and / or loans for entrepreneurs interested in fiber processing.
• Institutionalization and professionalization of
Rapid turnover of officials in public sector agencies related
to agriculture and livestock is a widespread and persistent
problem. CONACS , an agency of special importance for the
alpaca sector, has made important strides toward professionalization
in recent years. Its leadership and personnel must be protected
from politically motivated replacement, should pressures arise
with the change of government in 2006.
• Funding of livestock sector agencies.
Key public livestock sector organizations, including CONACS
and the Ministry of Agriculture’s Dirección de
Crianzas, need greater financial resources if they are to
more effectively promote pro-poor sector development. International
actors could help through direct funding of these entities
and / or by pressuring the new administration that will take
office in 2006 to prioritize these agencies and their programs.
• Coordination among and between donor projects and
Increased coordination among international and national organizations
that manage or fund livestock sector development projects
in Peru would prevent the duplication of efforts, and the
creation of organizations parallel to state agencies involved
in similar activities.
• Support for decentralization.
The importance of central state support to the new regional
and local governments, increased resource transfers (contingent
on the development of capacity at these levels), and the need
to clarify the functions of the new regional participatory
institutions through the correction of flaws in the legal
framework need to be reinforced and supported by local and
international development actors.
Specific Public Policies in Favour of Poor Livestock Keepers
Given the neo-liberal orientation of the Peruvian state and
the absence of a strong regulatory capacity, the range of
public policies that could be implemented to foster pro-poor
livestock sector development is limited. With those realities
in mind, four specific public policies that could promote
pro-poor development are recommended:
• Securing protection from subsidized imported dairy
products in free trade treaties.
The dairy sector faces the potential threat of cheap subsidized
milk imports from the US as a result of the free trade treaty
which was under negotiation at the time this research was
conducted. It would be reasonable for the Peruvian government
to demand a clause in the US free trade treaty that would
prevent the dumping of subsidized US dairy products at prices
below those charged for imports from other countries. The
milk producers themselves suggest fixed quotas. Two factors
limit the feasibility of this policy option: first, US intransigence
regarding its own subsidies for milk producers and its insistence
on eliminating Peru’s variable tariffs, and second,
the Peruvian government’s eagerness to finalize the
• Promoting direct marketing of alpaca fiber from producers
to the industries.
Most alpaca herders are extremely poor, insufficiently organized,
and geographically diffuse. Intermediaries buy fiber from
herders and then sell in bulk to the three major processing
industries. Reducing dependence on the intermediaries is in
the long-term interest of both producers and the processing
industries. The specialized state agency that focuses on the
camelid sector, CONACS, is currently working towards this
goal through the National System for Collection and Commercialization
of Alpaca Fiber initiative, which promotes producer-managed
collection centers to offer larger volumes of fiber directly
to the processing industries.
• Implementing national standards for quality grading
of alpaca fiber.
A uniform standard could make it possible for alpaca herders
to gain value-added by sorting fiber before sale to the industries.
At present, this option is less feasible because each industry
uses its own classification system. A uniform standard would
also provide incentives to producers to improve quality. Lingering
resistance from the three industries, which seem to value
autonomy in classification, and the weak regulatory capacity
of the state are two possible impediments to the implementation
of this policy.
• Exempting dried alpaca meat from value-added tax.
The state agency Pronaa purchases dried alpaca meat, known
as charqui, along with other food products, for distribution
in its national nutritional subsidy program. Charqui is produced
exclusively by poor alpaca herders and as such generates little
tax revenue. Charging value-added tax on charqui also runs
counter to the principle of equity in taxation. Small improvements
in welfare of herders would result if charqui were exempted
from the tax and if Pronaa used the money thus saved to purchase
additional dried meat for distribution to the urban poor.